In an interview with The Economist, President Donald Trump whiffed on a batch of economic facts on Thursday. He got the Canada-U.S. trade balance wrong, misplaced the U.S. in the world ranks of tax burdens and claimed to have coined an economic phrase that’s been familiar to economists for some 80 years.
Here’s some fact-checking via the Associated Press of some of his assertions to the magazine:
Trump: ‘We’re the highest-taxed nation in the world.’
The facts: Trump has repeatedly made variations on this false claim. The overall U.S. tax burden is actually one of the lowest among the 32 developed and large emerging-market economies tracked by the Organization for Economic Cooperation and Development. Taxes made up 26.4 per cent of the total U.S. economy in 2015, according to the OECD. That’s far below Denmark’s tax burden of 46.6 per cent, Britain’s 32.5 per cent or Germany’s 36.9 per cent. Just four OECD countries had a lower tax bite than the U.S.: South Korea, Ireland, Chile and Mexico.
Trump qualified his claim later in the interview by saying the top marginal corporate tax rate, specifically, is higher than in similar industrialized countries. That’s more or less true, although the higher rate is moderated by tax breaks not available in some of those other countries.
Trump: ‘Right now the U.S. has about a $15B trade deficit with Canada.’
The facts: His numbers are upside down. The United States actually ran an $8.1 billion US trade surplus with Canada last year, according to the latest numbers available from the Census Bureau. A $24.6 billion U.S. surplus with Canada in the trade of services, including tourism and software, outweighed a $16.5 billion deficit in the trade of goods, including autos and oil.
Trump, who regularly decries the loss of American manufacturing jobs, tends to emphasize trade in goods and ignore trade in services. His comment about Canada came as his administration seeks a renegotiation of the North American Free Trade Agreement with Canada and Mexico.
The U.S. last year ran a deficit of $750 billion in goods with the rest of the world but recorded a $249 billion surplus in services.
Trump: ‘You understand the expression ‘prime the pump’? I came up with it a couple of days ago.’
The facts: He didn’t coin that phrase. It’s a well-worn metaphor for generating faster growth, first made popular as an economic analogy more than 80 years ago during the Great Depression.
The Merriam-Webster dictionary people quickly tweeted that the phrase “priming the pump” has been around since the early 1800s.
‘Pump priming’ has been used to refer to government investment expenditures since at least 1933. https://t.co/VfkGwwzZRC
Literally, it’s about pouring water into a pump to allow it to create suction. The phrase was commonly used by mining publications during the 1920s, but it took on new significance after the economy cratered during the Depression.
By 1933, President Franklin D. Roosevelt had promoted the idea of flushing money into the economy to stimulate stronger growth with his New Deal policies. Such policies rankled Roosevelt’s predecessor, Herbert Hoover. “One of the ideas in these spendings is to prime the economic pump,” Hoover said in a 1935 post-presidential speech. “We might abandon this idea also, for it dries up the well of enterprise.”